FHB - Earnings call transcript Q3 2020

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the First Hawaiian Inc., Third Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there'll be a question-and-answer session. [Operator Instructions] Please be advised that the call will be recorded. [Operator Instructions] I will now turn the call over to Kevin Haseyama. ahead. go Please

Kevin Haseyama

President and we Michelle, quarter everyone, joining Risk Harrison, for XXXX. and Mallela, Thank Mesick, Ralph our thank financial as Chief Chairman, Bob are review me third CEO; results us Ravi With CFO; you, Officer. today you, and for of the

our that Investor We presentation downloading for is presentation refer website fhb.com in the we on in at prepared section. have slide our to Relations available and will a remarks The viewing today.

forward-looking making X be so will please harbor Slide we call, today's to statements, for statement. refer During safe our

We Bob. will And of measurements. The presentation most also these discuss to reconciliations GAAP to measures. comparable now certain I'll the non-GAAP contains to directly appendix financial turn non-GAAP the measurements financial over this call

Bob Harrison

joining on the can situation if and we I'd look X. you as at results. quarter Hawaii, morning review current update to third thank start an Slide you like for us here in with our Good

holding to reopening moved criteria the tier started tightening number restrictions. X positivity at had As and rate. September. under as strategy local The down with we a a new and in reported on August, early in late cases for second number Oahu into and reopening state yesterday new were island July in a late the COVID in a in restrictive of following early order most home tier X-tier quantitative loosening of cases went in and successful began tier the the reopened economy of low rise island and new X, daily Oahu our September we last the call, July,

Hawaii pre-travel travelers program they test the XX. program of on testing of the XX transpacific negative Hawaii. state's in start hours was traveling step if economy important allows within quarantine COVID-XX for reopening to the October The of bypass XX-day to the Another the

reason This day to the bank, XX.X%. in which after few enabling high of Over unemployment the is which in we restarting visitor number At for reopening four in will mortgage branches evaluation, as main borrowersto per the days, last step the X,XXX decided arrivals an for process But the rate, online of of In industry, range. portal, the at pandemic. a our closed the we've remain X,XXX begun have important the state's apply result further September tourist the seen remained the July, we that that permanently. the mortgage closed we launched digitally. of origination branches were is

to apply We also borrowers forgiveness. for PPP started prepared loan helping

webinarsin the to with several have SBA. we for borrowers forgiveness applications the SBA hosted the educate and to on have conjunction begun We forgiveness already process, submitting

turn to go a over had you if Now quarter. X, We third quarter solid I'll the Slide highlights.

and balance management Our economic economy, the reopening improved activity results reflect increased careful of asset sheet quality. local from

million, and increased net consumer we Third as our and the income while by XX.X% quarter interest we quarter, over also net improve million. the deposits quarter holding pre-provision $XXX $XXX to noninterest increased public deposit increased, commercial by flat. pretax In second had expenses to and million. mix, $XX.X revenue able deposits were reduced We income

our result, in total XX a contributed XX basis the this deposits points basis declined interest points. point basis As to And cost net of to margin. six improvement

second third remains the the in improved from quality unchanged our quarter. Asset quarter, outlook economic and relatively current

quality, at deferrals. share, to dividend the and dividend loan provisioning our to much a quarter capital, our with was ratio. to finished now loss, As Board per $X.XX a the for expense And payout quarter. Ralph We not $X.X million we XX% over did asset I'll turn maintained add strong provision for and allowance result, credit and it the liquidity discuss the need to and

Ralph Mesick

this provision on change criticized higher little some we Bob. nonperforming credits. and X executed estimate, Slide Loan fell of quarter to loans risk exceeded was recoveries highlights to and minimal. on asset With you, quality. plans our manage as provides the the Thank charge-offs reserve level

For a small compared quarter. charge-offs in recovery the net QX $XX.X to of $XX,XXX. quarter, the Recoveries charge-offs net provision showed million QX. million million We million, of $XX.X in down was by exceeded the $X.X from prior $X.X in

$XXX On due held nonperforming in subsequently from XX% accruing to million the XX about of or on million, the both fell of Slide loans in $XX.X leases. Criticized economy, forward October, due We loans resulting status, in the increased $X.X quarter and commercial They you X.X% total quarter. $XX.X X, improvement PPP Assets an by nonaccrual are and of decreased days about segments. points from were a The balance on loans $XXX.X relatively million. quarter basis to roll $X million million. a is risk of approximately slightly for a reserve last and all from second reflected of allowance in past profile million disclosure $XX.X the The million in sold $XX.X loans $XXX sale. approximately smaller loans, about which to a decreased million the early X.XX%, million smaller to transferred and gain excluding by the see loans. XX the view portfolio. Past for sheet unchanged nonaccrual increase

Hawaii of teens, forecast to Economic average unemployment forecast. XXXX base closely aligned current the case Organization for University The to Research local projects or to real measures rebound personal UHERO forecast economic of middle in is stronger the drop in recovery decline Our the the until not and GDP. XXXX in and XXXX. XX% income a of these a until X% low A expected not about

on rely quarter support that XX% Around of the amounted this We of the reserve. embedded be At can to qualitative XX% end, portfolio. not attributed loan to continue in expectations the about default overlay COVID. overlay to to a

to Turning X. Slide

to XX% period. returned second mortgages SBA to original only XX%. who that the loans those borrowers, small we the XX% these programs, bulk based relief. have at a deferrals deferral -- are showing Around The payment of some recap of the and the XX-day mortgages. related ratio most tied X% performed. received to These their the see for loans start loan-to-value outstanding since We deferral a loans provided to have of considerations. a months granted six You of by residential of balance under loans over well where is had a up at on remaining deferrals had of with snapshot loans on the About offered the pandemic portion except balance residential additional with deferral part how loans have collateralized completed are to a and

at Last quarter, X. completed show end. review we our Slide identify delayed of to risk we of meeting had commercial to mentioned composition We credits the Moving active rating assuming a management. higher-risk a portfolio loans, by quarter recovery

manage to quarter, taking exit rehabilitation support focused objectives. these This credits, on or we retention, implementing actions to strategies

reflect and During $XXX $X numbers the saw net and in recap nonaccrual loans were Slide million. after On in a you quarter, have the industry we sale loans we a These impacted on see X, the past. quarter. million sold substandard presented loans in for under that mention by the reduction of reductions slide special contract the

these reduction of properties global in Hospitality XX% it here stay modest, exposure of ahead in to industries. hotel issues. but travel. be of look companies loans we About are to Our is credit focus an and by area as the continue criticized potential our remains impacted

through time. their reserves have liquidity Our cut this and to to able expenses bolster been borrowers manage

modest portfolio We reductions expect largely some our in through recapitalizations.

mentioned had the has been in ensure to business. calls, we volatility the credit lending in profiles always in mitigate we have space previous As inherent targeted this stronger that that

property retail track and to We businesses vacancy anticipate collection their continue or we should the could see well, additional adjust stress As space to properties in experience issues. ability they loans this to current conditions. tenant-related assess

new rebound demand. will that are continue their We anticipate experiencing our partly reopened production. vehicle because decline inventory a of would levels I to in here that have Finally, disruption note a fall, as and dealers balance in

to I'll go over the to call statement. over the balance Now income and sheet turn Ravi

Ravi Mallela

you, Thank Ralph.

that Shared we solid X. portfolio, balances. to down $XXX early million Turning estate. and occurred Credit and of smaller the in X.X% took a Slide credits were number prior and that in part $XX.X downs quarter. in growth the versus or to the National leases balances loans due flooring C&I QX, down declines billion, real QX declined in construction pay dealer million their Period-end quarter the of pay to commercial in In saw the a opportunity $XXX

volume our portfolio Mortgage loan origination in quarter. low an due active $XXX mortgage strong the saw and estate also real to million over in rates originations We market. residential were

at balances grew decrease billion, $XX.X by balances commercial and Slide million prior versus quarter. deposit $XXX XX. a Total to the $XXX ended Turning Consumer million. quarter deposit the

planned, $XXX $XXX matured we balances deposits million As public time in and public as had by off. declined million, rolled deposit

year-end. down deployed QX in deposits stimulus public gets expect to slightly before money as trend We

basis XX to fell quarter. deposits in of cost Our points the

million $X.X million the XX. the was costs. increase primarily about lower was Net $X.X in higher liquidity, XX margin margin from a and the excess lower Turning balances deposit $XXX full and the quarter. The prior was quarter. the million income These to to a interest lower $XXX to a million, interest versus from increase loan point of FHLB X.XX%, balances. Slide due offset Net a $X.X were interest by increase increase in The expense portfolio interest investment was million partially due benefit portfolio. of previous income basis to from reduction primarily increase quarter's from due lower

the from rate environment. continue we to forward, low Going headwinds interest face

quarter fourth remain relatively However, we in that the stable. will anticipate NIM

expenses to increase was in $XX.X turn third noninterest the $X.X to levels flat reopening Slide customer back prior million, income early the And in and by driven started gradual was it July. I'll the now previous of quarter, following income The were local higher Turning essentially ratio efficiency Noninterest the the that higher million the XX. was activity Noninterest $XX.X economy Bob. in quarter. million, XX%. than to quarter of

Bob Harrison

you, Thank Ravi.

in an in up activity-based the had quarter, in the revenue recovery economy we and quality. wrap to asset a So reopened, local third improvement

economy manage significantly outlook overall the and early second economy days as only to we continue since changed hasn't began Hawaii actively we the quarter, risk. our the travel still credit for week It's on in on the industry. will questions. take the road first testing your for visitor for to program pre-travel transpacific the happy the now Hopefully, to this a we'd And ago. step recovery be be Our

Operator

of Our from comes Alexopoulos Steven Instructions] [Operator JPMorgan. question first

line open. Your is

Steven Alexopoulos

when big a visitors mentioned And maybe, local take to a regarding go pressure at question, But the Hawaii. initial you per compare that start, it's off X,XXX back know X,XXX into that I did does only day, week. travel where picture to me just the need resuming to Bob, Let to how expectations? the economies?

Bob Harrison

that app? Christmas the think Yes. for the excellent states of expectations. get lot out process still checking to working we pretesting? us got is comfort out good kind the partner still it start identified out kinks to the Is But very of saying have to see the would would people you with the have idea between correct working have we at won't And really Steve. thought get state, -- start try we This starting are it and and And until My message way in to question, the to a volume job partners thought what And of that's period moving a slow, my done people test? has again. then that the has. qualify it -- about be holidays. the and message the right out. very things, of provider well out people the It's for state start the will as try good -- and -- We the frankly, airport, a the did in there's and with and -- word there's we allow will level download the fantastic a all build it and time to unscientific that we I a is get we to an work work and airline didn't out through getting Thanksgiving have those now industry holidays. we visitor process. few slow it And has quite traveling All

return to is As what need to we of normalcy. far level a kind as

in industry UHERO they building next we time over the have think over on And pretty months. that. see you'll forecast a why I tourism conservative six that's see the the that outlook that

Steven Alexopoulos

helpful about it, a to think That's Bob. Okay. way

term? Can temporary like when the a Ravi, you but it's And margin, about talk pretty flat sounded about to support -- see afterwards? were cautious, XQ. supporting were On in then what that and it near NIM, funny talking you you maybe guided you you is pressure expect then them you is

Ravi Mallela

Certainly, I pressure on asset think there'll the side. be

our refinancing see downs. going yields primarily lower. securities portfolio. obviously mortgage our New in down -- pay to are And to see activity And grinding in continue we're we'll

roll In million actually end frankly, maybe name balance QX, of areas. of I we think $XXX sheet, the upsides the I'll July. FHLB expense. occurred the but maturities three had that interest are, the at on off

we'll bit so And more pick little up QX. in a

not certainly, there's maybe there's room deposit deposit the of think room bit lot, were but a the bit control amount the go some that to little And but for don't side. at We will quarter side, for and I back of trending but deposits, the us increasing. quarter, NIM be a -- public and sheet. -- see down down. on those about those some we declining basis feel about on whole sense deposit points our and potentially XX to think we on the what over balance of we the But certainly, stable the to a costs in the commercial deposits We comes for when course coming room see then little liquidity of quarter, we know could that consumer some they're deposits, we given pressures. the giving deposits the I think

Steven Alexopoulos

Okay.

the drive better assumption to should that growth? just flattish can from what pretax you at we over a least to expectations the we there so bit near maybe about growth? thinking about should up, over Is the anything that moving good more, on down. forward? and on pre-provision getting be being little what pretax think, NIM I -- here Is credit. if can on do are talk most It's next about a wrap Bob, okay, think comfortable, investors, term year pre-provision growth be So flat

Bob Harrison

different in it what that Yes. Good going revenue. to help churn up I the look see portfolio. things. going it's of I'll we're it question, with are there at protect down comes net us are the -- going a And Steve. And pre-provision balances to to and this really recover residential be standpoint. working full won't a really, volume. couple Teams from loan to keep to And One, is to continued speed that

And so you'll that. see

much selling that putting We of that We're on been more sheet. have production. some balance of

million Also, there year. area might So several the that growth that in line end that surprise. hundred from dealer are it's down Obviously, from the balances some be the item. a of

I gets which think line item dealers all cautiously. think XX the are I right real sales the how thirdly, gradual the They're items. then going months. And rebuild you'll to online, strong think, be careful from of have about. now are that But a of to are they'll virtually in back us those XX build our commercial now. very the the we manufacturers start are been. inventories, as low to that together projects that last, deals do see, production their as And estate there funding, I two number put over construction in And portfolio, lead a around that

quarter saw first, Of and to in in drop all there we is significant the as equity borrowers' now fairly just some that see starting course, the we're ended.

Ravi, are we you'd to areas add? could think growth. like those for So to loan anything look I three

Ravi Mallela

couple just to slowed of side. there But a pressure to We've be forward. some our fortunate expense will of looking some on Certainly, I'd Maybe the expenses we be comments spending. hold down discretionary add we've able -- flat. been

in investing expect implementation. our invest pick itself. tick little see starts we'll as business activity maybe on to up up. comp the up, as we more core platform related We're in open And to working the We're bit. We the to a to We're economic incentive some start to those expenses continuing start to businesses.

provide to a on related qualification the Just to PPP. wanted side expenses

Bob Harrison

still do And type we'll -- better rate. there while return, activity whether one income, and and fees a credit economy as not full card the as continue quarter as didn't it's maybe debit than activity-related some we we reopening, much that's be merchant the reopens And which the of well, QX, it's at see normal is still should processing, thing visitors run beneficial. see and last

Operator

from question next Securities. America comes Bank of Ebrahim of Our Poonawala

line open. is Your

Ebrahim Poonawala

I follow think... to I on wanted up credit. Just mean,

Bob Harrison

Ebrahim, hear could can hardly little you. sorry, bit? speak a I'm you up We

Ebrahim Poonawala

any Yes. better Is now? this

Bob Harrison

Yes. Go bit. ahead. A little

Ebrahim Poonawala

Yes.

a a we follow after losses? losses? credit around this portfolio. were sort in concern based six pandemic level, of to start like look better Hawaii. months having and Or just to a lockdowns terms feel reserving you've the of the just Bob, sense up a around on credit it And a that And recovery the around in expectations despite of middle feel this review us still talk your risk quarter, at for wanted you before and does you this on I credit reserved guess lot when distance, there's from the Just adequately for pause second, done, does of actually in comfort then

Bob Harrison

then a a maybe it start and larger I'll still borrowers, we we over in start commercial with guess handle and that on very our good have question Excellent spent to very the portfolio. I strong. is with, of on time to borrowers, lot going turn what's we feel Residential and Ralph. certainly commercial

that The to the performing So like we concerns guys Ralph better is than we of than consumer. have very area. to better and very, seen candidly years see is business consumer level would expect little in and in and around very you of cycles. low in The much not expect unemployment, unknown the XX I much after previous payment. Because the have would the XX% strong the return delinquencies

a help. I recovery stimulus positively And additional stimulus, don't that just by there certainly full yet. know before would But think help. we impacted is been huge government the that's been that's and if Hawaii, in

and we've today, mentioned, taken I'll and speak far have allowance Ralph? that that at qualitative at all credit provision in overlay him look that our area how also we that think let reason. But I just we a model, Ralph for as account to, into the loss for looking as as our and

Ralph Mesick

and mention Sure. are substandard, anticipated loans smaller if companies, then my side ones so I think of the we think at And and at larger probably the guess portfolio repositioning. that I companies, would business the been I the to we look by large, I really as they're think have standpoint, able I special the are would difficulty. composition the between from substandard the businesses, having say, their you the and have is, ones look reposition they that

that what looking extent our had secondarily, think we issues employees, I of one haven't to think Right questions off around. mean consumer that been laying to work now, the then at one book. collecting the they've with mean I watch. able think And I really the is, a of really they're to and area continue landlords. that I to lot rents, they've but their tenants, we'll would been that's

So we credits mention, put have special on for purpose. just a that we number that of

Bob Harrison

Does question, address that EB? your

Ebrahim Poonawala

as have as baseline returned next part into know that's fair think see Yes, look of X% is if assume lot it recently. not your flights increasing does. that trying but normalcy I'm seems cost that. of like next we sort of follow-up I'm the stock the a back at of same the should guess And next airlines, at to from history. to forecast, I it worst to yield likely I you're a Hawaii, Air just we to trying to of I coming year, woods, terms middle like about I mean relative year? sense, Alaska It summer, I think heard just fair behind? a into of relatively trading forward Hawaiian your a are I right? to And in mean, a listened when amount motion. into the Is of valuation the get things credit out dividend cheap we is

Bob Harrison

to far forecast. pretty That's

issues comfortable time. forecast what far we case portfolio, have UHERO case as up provisioning. the the think that's see with that's as that but why reserved think at within we've really certainly I in the come with included base our but will uncertainty, We're this we base we're is qualitative and very for added at overlay. allowance, adequately more we're where our we the There

Operator

comes next Matters from Our Goldman Alex Sachs. from question

Your line is open.

Alex Matters

very and environment, the down criticized a strong materially. for quarter obviously, So this credit results was given nonperformers

benign would just wondering embedded that, the earlier I'm if we cycle that to to continue what start to could frame the what in have you an and reduce year? add-on point time through think metrics second, the would First, migration some comment near been sort up the does your you for in And to if on then as this about of assumptions see remain at expectations losses that? term, over credit point,

Ralph Mesick

would we're into operating say assumption I days we're early this. under Yes. that the

is portfolio. we We given appropriate composition reserved think what of the have for the

time, deterioration benign over the provision think -- if and to have think do has metrics that in in you're to outlook. But more can as would expect people consumer but going with change return I to out, were now, I turned it stay -- some if our quality see expectation right we see we lot going asset pay the relatively maybe the we we're portfolio, this into was a but to been our fabulous. going issues, having the

Bob Harrison

to on maybe follow-up would this of part on a too -- tell the to if comfortable just question, call is to that us, is second I early behind feel we're when right make looking we that's when say now. And a worst Bob. your the

least Hawaii is what we'd in a a impact have be at full and to the had recession one would on it the quarters what think I good Hawaii two before the economy. of recovery more the has economy idea

Alex Matters

a drove NII you And on follow-up versus particularly comment just reported the last where sort quick quarter? portfolio, maybe could the then And production step-up you're in this helpful. That's your of seeing and quarter Okay. this quarter? what side mortgage yields new the on

Ravi Mallela

is This Alex. Yes. Ravi. I'll comment on that,

in from accrual saw that came should that QX in we really we booked in QX maybe was an what been QX. put -- think I have

yields would forward think want you would look, of to were yields sort with where that -- where line if average I forward in look to and So start our QX.

but seeing you Certainly, point a think that of And starting we're X.XX% activity -- would to space. lot in they for were I QX. a X.XX% and good in refinancing think at forward from build going you look there. is for I QX,

Alex Matters

are appreciate do where sense coming And it. currently? loans of on I Okay. new you a have

Ravi Mallela

I we that public. information out think don't provide as

Operator

Our comes KBW. Jackie Bohlen from next question of

is line open. Your

Jackie Bohlen

in the something bit balance. nonperformer taken that that you Just you'd mark little wanted the sizable October. about a to that Was That's sale talk pretty a already on a on? gain had credit

Ralph Mesick

Yes. when I that's are of regrading that weakness credit the the -- had a actually, number had credits did before we there COVID. actually project some

those And on We analysis, did an ended anticipated. those nonaccrual. so we on we than And we impairment loans much placed took up better some charges what that. on price a had getting

where So game in. that came the was

Jackie Bohlen

Okay. And through you what the geography what next expect items -- run for purposes, to quarter? just game line

Ralph Mesick

but it's I That, Ravi, a as gain I'll recovery. defer opposed to be to going a to think

Ravi Mallela

income the to get I line, through you. but that goes we'll think back other

Jackie Bohlen

Okay.

industry, there loans Okay. at any looking we're between estate. last commercial calling commonality commercial that? balance Was terms just balances like and And real these well quarter on and with the point-to-point our based or in then then anything from as discussion of

Bob Harrison

sorry, I'm Jackie, this Bob. is

Just are to to, loans which referring the that had we you're recover? to ones clarify,

Jackie Bohlen

continue. -- nonperformers the I'm future there's down that sold, the that wondering are ones The as to more pipeline Yes. in are if come the just workouts

Ravi Mallela

sort we the those, challenges. out Well, were said, I while looking we And at get for deals. of strategies on credits to those of books as had no, were actively a had that that these

that. So out, able to it as turned were affect we

Bob Harrison

in and real commercial portfolios. were they the geography, as the far C&I as And estate

Jackie Bohlen

Okay.

out were looking out gotten since So everything of? of, get you've to that you

Bob Harrison

large it's mean, We have a I portfolio. still nonperformers. Well,

of all we're So actively those credits. working

Ralph Mesick

Yes.

I on every plan. have either asset going think is or most part, the the So situation. credit we'll an credits And retain depending to for exit

Jackie Bohlen

Okay.

switching looking then expenses. And at Okay. and gears

of permanently this some was to an you're four the that mentioned provide You to does What kind Ravi close going of discussing? that offset investments branches.

Bob Harrison

-- quite direct been amount. many we've personnel been Well, doing we it's dollar managing given frankly, closely, not our branches quite had how we've is a What closed.

natural calls in they other a that have mentioned and attrition. we people of I where you repositioned needed were the lot your bank previous areas in those of As

retail of comment? kind anything that quite Ravi, works the as the work and branches, you for But personnel So in side through there's re-staff further bank. a to the of the mix been

Ravi Mallela

No.

Operator

Andrew Liesch comes next question Our from Sandler. Piper of

open. Your line is

Andrew Liesch

right points. than the here, obviously, into just I'm And basis the liquidity quarters. Just curious, book the invest was to a in opportunities yield increased securities curious the little only it like more about down last challenging loan.So the average past. But seven few

-- what the you have this up adding yield near what level? been keep to Just

Ravi Mallela

mean they're somewhere -- I'd low a point, say of Yes out little certainly, to you Andrew. maybe of a when characterize I the is I it. in what coming X% to terms think thinking they're But differently, yield. marketplace it will seeing we're I'd about sort you're if close about in

I big. -- buying what we're were we QX. the pretty and in book there's So billion, has -- $X.X been at believe, It's

asset extend us, little characterize our relatively offset And of only so liquidity also, comfortable way to excess provide trying there's sort a liquidity that and to feel we're is mean really deploy assets portfolio, strategy risk-weighted with it keeping are is book but sensitivity. lot would to of that we investment bit and momentum I the the in the we of that flat. that I already portfolio built to not a up duration there, of low looking that

X.X. look you at and I that X.XX, If year, at on above duration the beginning book the bit little we're believe portfolio I that think the about a was of that

it's buying been where them. about of And we specific the securities really as heading. portfolio some have we've and very good feel duration embedded types in So a result, that

Andrew Liesch

the forgiveness started that just presentation helpful. PPP really That's the then in And process. reference Okay.

Just of the sort you forgiven early that or timing is being that curious How can updates of by results you've -- sort there. seen the what provide on process going? any And those SBA?

Bob Harrison

XXX have of We've them zero Sure. and on so submitted heard over far. well back

it's still So early.

loans. And not have through they the that's of fair or SBA, through for everybody munition is is lot I a that I've under working pretty changed been common. changed the know I loans seen there's think treasury yet. just submitted, secretary a $XX,XXX think but forgiven the requirement process been nationally and What is amount the you

we really for to holding were so something contacting borrowers, like happen. And hoping that those off

So and the a group a it's bit, we then simple time. process. early and not documentation some to a process process, it it's redo well. bit, our It's But that to in to as doing take we'll redo have borrower a be outreach the looks like going broader

paperwork there not we're amount time. that, of trying to will take of to some I ready borrowers on think, their going but fair do them get order, and is a So a to it with quick education is The the get idea turnaround happen. in

Operator

Vandervliet of Our from UBS. next question Brock comes

open. is line Your

Unidentified Analyst

just the CRE for Brock. was some being provisioning and directionally, It wanted to walk looks be just by and on sounds This C&I with then there to segment I disclosed know others But maybe. some specifically, anything It there's being aware we qualitative variance there Slide of positive. there's that wanted X. like provision you is there. differences should through negative if like

Ravi Mallela

The really far improved. overlay. small. smaller a provision amount book, the as credits we the more grade to substantial We qualitative portfolio business was for that a little did a continue No. consumer seeing as side pretty fairly risk in to stress not composition although yet. on we're terms And of The hold put bit related

Unidentified Analyst

Okay.

it approach be else? any by rate something just be CARES I'm Act keeping cure those? deferrals looks been -- or talk current don't Would what a return can under The your Okay. And it's dealing credit. high for going in like would modification the about there you But pretty thus just far. like longer-term with that to with year-end,

Ravi Mallela

going we in forward, looking I much No, think recession. any pretty at I we're we this, Yes. like think would --

process. through to And a workout, we're regard to to on with end have it's credit, If probably be up it So we'll going going we I that here mortgage we're TDR think a if the work going a side, a on commercial to like status. we putting modifying we're until, -- treat and then it moratorium the think, lending credit, I foreclosures. January

although be would I there'll at -- periods even very now, little do we've them right this for given So anyway. we point able be think modification, that longer to

Unidentified Analyst

there you with come And remind the on the comfortable on how actual lastly, and Okay. could eventually hospitality content of are portfolios? loss it? can just that on us just retail the out you And LTVs

Ravi Mallela

of a doing an we at credits, haven't tell assuming And we of it's LTVs we're the but we are purposes is years. of a quite cases, that in lot bit as loan, doing, things are information, of in providing if can oneX for look a we stress updated you evaluation. property first couple the No, Yes. I the the of

these them informing a the risk that need treating lease-up. of like like construction through are of of some and not And to is the and properties their credit. new go kind stabilized grade So

Operator

Shaw of Jared next comes Fargo Securities. Our Wells from question

Your line open. is

Jared Shaw

at what new to the the the and based allowance UHERO ex summer to is compared economy. and forecast certainly Moody's And or surprised to forecast weaker peers. Just mainland -- past, this of provision credit. weaker the guess But allowance that an back the the bigger quarter, circle the said just came compared you've was is projections. significantly I in didn't September, out UHERO in we quarter, in earlier was improved see PPP on the end at UHERO the happening on really since below pretty for U.S. model-driven and especially provision the I'm a broader

that in is mean, Or UHERO? the September to I the for be included updated provision level? quarter So the was third model going

Bob Harrison

end to very close updated their our And the comfortable quarter, outlook, outlook. that. base with they very Ralph. the at not the of and different start pessimistic the previous than This model, over then we we the that then as was model and had model and we we what feel view base theX was off hand it, for maybe UHERO current and is looked views, for that of Bob. our had view it we that's to And use . I'll the to What in

to? So Ralph, want do you

Ralph Mesick

to don't I think landed. And is Last be. a is much have add. transitioned to today pessimistic Yes. really this case And where lot they quarter, to more their an base was that we pretty case. case believe we appropriate place that's we where sort of the quarter,

Bob Harrison

what in the we're that. portfolio seeing And supports honestly,

Operator

Our next question Hunsicker of Laurie Point. Compass from comes

Your line is open.

Laurie Hunsicker

looks to right sure I'm I absolutely want which I'll way. understanding beautiful. Slide make this X, start just on just that And the

sometime XX, And looking $XX commercial at And be guess, down September that Am I commercial. in deferrals, were October, million the I your right will million. this in to the takes So then, you up $X.X deferral as reading to then second $XX you're if down I'm of your at billion. October, it way?

Ravi Mallela

deferral credits under $XX $XX the million plus the right are that the be would So now million.

Laurie Hunsicker

Plus -- okay, so $XXX unbelievable. it's million,

auto, That's of the leverage. food us categories, hotel, since each give those And so and service retail, they're for then you helpful. deferrals down Okay. on refresh Slide I could X, on transportation, was massively a hoping

Ravi Mallela

it's have I in really the but credits can for numbers, you Yes. tell space. I and don't that hospitality that large small pretty no you,

Bob Harrison

did a in auto talked in as number we about deferrals have the we And of past. the space

Ravi Mallela

Yes, we're off that.

Bob Harrison

pay. those so to all current return And

Ravi Mallela

extent deferrals. you a thing the And that on they're giving mention getting other is they're something at the commercial this to us point. deferral, the To I'd

Laurie Hunsicker

Okay.

million? bucket now kind quarter your $X.X looking So I so or that say, $XXX $X.X the out those deferrals in you're it? $XXX way billion so about right, good of down highlighted think a commercial guess, could just million, categories? last of and deferral XX% So are to of of that, at to and on we total Is was billion, maybe extrapolate that

Ravi Mallela

don't number, actually that I'm Laurie, I have sorry. Yes,

Laurie Hunsicker

Okay.

You you with know follow-up offline. I'll what,

remaining PPP if as thinking just you that Just tighter of they're I'm more don't on a I September million. The question. know had fees number around were that. one $XX right XX,

Bob Harrison

term when What them we the the book we loan. book done them we've is of for

income brought specific of into the those statement being And they're overthe each term of loans. so

Laurie Hunsicker

I'm just much mean I wondering how Right, remains.

of as $XX okay. quarter. So I'm million last just you had --

me. know You it what, follow you up I'll That's offline. for with

Bob Harrison

Okay.

Operator

to to for Haseyama no the turn further closing I'd any over call are remarks. like Kevin back questions. There

Kevin Haseyama

if contact Hawaiian, please additional We a us, interest First good again appreciate me, your in questions. free you and feel Thanks for any weekend. have to have joining and

Operator

this today's gentlemen, you concludes and Ladies conference participating. call. Thank for

You a disconnect. have may day. Everyone, now great

First Hawaiian (FHB) 23 Oct 202020 Q3 Earnings call transcript